A False Start on the Road to an All-American Bitcoin

Mining firms are also facing heightened competition for limited energy resources in the US, mostly from AI companies flush with venture funding. New projections from the US Department of Energy indicate that, by 2028, AI could consume the equivalent amount of electricity as 22 percent of US households. “Miners have always been scrappy buyers. They are kind of the vultures of the power grid,” says Bendiksen. “The AI companies are outbidding—they are just willing to pay more.”

The tariff hikes alone are not enough to drive bitcoin miners out of the US; by comparison to the price of energy, say, the cost of a hardware import levy has only a small impact on the viability of a mining operation, claims Thiel. But as an aggravating factor in an already unfavorable environment, they matter.

“Typically, this type of shock would lead to consolidation,” says Thiemo Fetzer, a professor of economics at the University of Warwick, referring to the tariffs. “A priori, one would expect a cull of small miners because of the rising cost of equipment and greater supply chain uncertainty.”

Bitcoin mining firms operating in the US—including Riot Platforms, Bitfarms, MARA, CoreWeave, Core Scientific, Hut 8, Iris Energy, and others—are already scrambling to diversify out of the mining market, reworking their facilities to accommodate AI training and high-performance computing. Only few large outfits, like CleanSpark, remain committed to bitcoin mining exclusively.

“Most of the miners are throwing in the towel,” says Bendiksen. “I think a lot of people were going down this route before the tariffs. But tariffs have probably confirmed the validity of that strategy.”

Some, among them MARA, are choosing to expand their mining operations into countries other than the US, negating tariff risk. “Why do you want to have a lot of international business? It eliminates single-bullet regime risk,” says Thiel. “I’m a big believer in you have to have optionality as a bitcoin miner.”

Meanwhile, Bitmain and MicroBT are ramping up manufacturing capacity within the US, potentially eroding part of the value proposition—tariff immunity—currently pushing buyers towards companies like Auradine. “We’re actively investing in the US, including manufacturing,” says Gao.

For now, bitcoin mining firms are in a holding pattern. Until the 90-day pause on Trump’s new tariffs comes to an end in July, the extent of their financial impact will remain uncertain—and firms are delaying hardware procurement decisions accordingly. “I think people are looking at where things will bottom out on the tariffs,” says Khemani.

On their face, Trump’s tariffs stand at odds with his stated ambitions for the US bitcoin mining industry, even as his own sons forge into the sector. “The tariffs are clearly destructive,” claims Bendiksen.

To achieve both ends—to drive business towards US-based bitcoin mining hardware makers, whilst lending support to bitcoin mining firms facing deteriorating economics in the US—would require Trump to pull on other levers to balance out the impact of tariffs. One option would be to prioritize the buildout of new energy generation capacity, analysts say, creating an abundance that in theory would drive down a major input cost for bitcoin mining.

The Trump administration claims that a raft of recent executive orders will combine to reduce energy costs in the US. But so far, the picture on the ground—the deprioritization of bitcoin mining among US firms—indicates that Trump’s message about the prospect of all-American bitcoin is “basically just words,” claims Bendiksen. “It’s just pandering to nationalist feelings.”